April 25, 2014 [OPIS] - NuStar Energy LP said on Wednesday that it has raised its cash flow and net income significantly for the first quarter by improving the company's profitability after divesting its remaining interest in the asphalt joint venture and finalizing several agreements related to its pipeline and terminal operations.
NuStar has increased its first quarter 2014 distributable cash flow from continuing operations available to limited partners of $77.9 million, or $1.00 per unit, compared to 2013 first quarter distributable cash flow from continuing operations available to limited partners of $57.1 million, or $0.73 per unit.
First quarter earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations was $126.7 million compared to first quarter 2013 EBITDA of $94.1 million.
NuStar Energy LP reported first quarter net income applicable to limited partners of $28.1 million, or $0.36 per unit, compared to $13.3 million, or $0.17 per unit, earned in the first quarter of 2013.
“NuStar’s first quarter EPU and distributable cash flow results were our strongest first quarter results since 2009,” said Brad Barron, President and Chief Executive Officer of NuStar Energy LP and NuStar GP Holdings LLC.
“They were also much higher than last year and we expect our results to continue to exceed last year’s results as we move through the remainder of 2014,” he added.
In February, NuStar signed of a long-term agreement with Occidental Petroleum to transport NGLs on its currently idled, 200-mile, 12-inch pipeline between Mont Belvieu and Corpus Christi, Texas.
In early March, NuStar signed long-term storage agreements for its St. Eustatius and Pt. Tupper terminals for a combined 8 million bbl of storage capacity.
In mid-February, NuStar completed the construction of a private marine loading dock at its North Beach Terminal in Corpus Christi, Texas.
This new dock more than tripled the previous loading capacity, of approximately 125,000 b/d, and will allow NuStar to handle all the new volume associated with Phase 1 and Phase 2 of the South Texas Crude Oil Pipeline expansion, as well as additional volumes shipped to Corpus Christi. This facility recently loaded 700,000 bbl in a 24-hour period.
Phase 1 of the South Texas Crude Oil Pipeline expansion is scheduled to start service in May of 2014 and will allow for increased throughputs of 35,000 b/d.
Phase 2, which will allow for an additional 65,000 b/d, is expected to come on line during the first quarter of 2015.
NuStar’s 12-inch pipeline between Mont Belvieu and Corpus Christi, Texas, has already begun generating distributable cash flow and is expected to be in full
NGL service in the second quarter of 2015, at which time it is expected to generate an incremental $23 million in annual EBITDA.
Occidental Petroleum Corporation will utilize the majority of the line’s 110,000-b/d capacity.
“EBITDA results in our pipeline and fuels marketing segments are expected to be higher than last year’s second quarter primarily due to increased pipeline throughputs and improved results in our bunkering operations.
Second quarter storage segment results are expected to be down slightly compared to the same quarter last year,” said Barron.
“Reaffirming the 2014 guidance we provided in February, we expect our pipeline segment EBITDA to be $40 to $60 million higher than 2013 and our storage segment adjusted EBITDA to be comparable to 2013. We expect our fuels marketing segment to generate EBITDA in the range of $10 to $30 million.
Based on these projections, we expect to start covering our distributions in the second half of 2014 and for the full year 2014,” he said.
NuStar expects to spend $350 to $370 million on internal growth projects during 2014, the majority of which will be spent on projects in its pipeline segment. Its 2014 reliability capital spending remains unchanged in the range of $35 to $45 million.
NuStar Energy LP, a publicly traded master limited partnership based in San Antonio, is one of the largest independent liquids terminal and pipeline operators in the nation. NuStar currently has 8,643 miles of pipeline and 87 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids.
The partnership’s combined system has approximately 94 million barrels of storage capacity, and NuStar has operations in the United States, Canada, Mexico, the Netherlands, including St. Eustatius in the Caribbean, the United Kingdom and Turkey.
